For the week ended January 27, the Indian stock market closed down 2 percent. Investors became cautious ahead of last week’s Union Budget. Let us inform you that the Union budget of India will be presented on February 1st. There will also be a meeting of the US Federal Reserve in America. The eyes of the market will be on that. For the week ended January 27, the Sensex closed at 59330.09, down 1290.87 points, or 2.12 percent. At the same time, the Nifty closed at the 17604.35 level, down 432.3 points, or 2.34 percent.
Small and mid-sized stocks declined more than giants
Compared to the giants, small to mid-sized stocks have seen a bigger decline. The BSE mid-cap index closed down 2.6 percent. And the small cap closed down 3.5 percent. While the largecap index closed down 3 percent. If you fear the smallcap index, Kiri Industries, GTL Infrastructure, Dixon Technologies, PC Jeweler, Monarch Networth Capital, Power Mech Projects, Jayant Agro-Organics and KBC Global all closed down 15 to 26 percent.
On the other hand, Manaksia, Kabra Extrusion Technik, SVP Global Textiles, Bliss GVS Pharma, Sandur Manganese and Iron Ores, Control Print and Shalimar Paints closed with gains of 9 to 17 percent.
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How can the market move next week?
Vinod Nair from Geojit Financial Services says that despite good results from blue-chip companies, a negative research report on Asia’s wealthiest promoter group companies spoiled market sentiment this week. Apart from that, the continued selling by FIIs also put pressure on the market. He added that the LTCG tax rate, or its duration in the budget, should be increased. Or if populist decisions are made in the face of upcoming elections, market sentiment may deteriorate in the short-term. Apart from that, an increase in crude oil prices due to increasing demand in China can also put pressure on the market in the short term.
Apoorva Seth of SAMCO Securities says that Nifty formed an inverted flag formation last week and moved below its key support. This is an indication that we may be seeing more pressure on the Nifty. This drop can be seen at 16750. For now, however, Nifty sees support at 17500. On the downside, resistance is visible at 17800.
Amol Athawale of Kotak Securities Let’s assume on Jan 27th 17800 strong support of last week is broken. It formed a long variance candle on the weekly chart. From a technical perspective, if Nifty manages to hold above 17650, a slight pullback rally can be seen in it. On the other hand, if Nifty slides below 17550, this drop can extend to 17400 and then to the 200 SMA at 17300.
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